[ballofrubber]

1. You don't decide whats a waste of energy or not.

2. https://www.youtube.com/watch?v=xLYYh4aPXAM

3. Bitcoin Mining will make investments in renewable energy a lot less riskier as you can scale up as much as you want and always have a buyer. This drives out fossil fuel miners

4. Once bitcoins true price has been found, holders will spend to consume as much as they need/want to. Just like every other currency, except without the inherent need to spend(fixed issuance)

[hjek]

> 1. You don't decide whats a waste of energy or not.

Whether or not it's a "waste", it's certainly a massive amount. More than all of Argentina or Netherlands[0], as was posted here on HN recently. As of 2020, every single Bitcoin transaction uses the equivalent of 15 full charges of a Tesla car battery[1].

Also: You don't decide whether I (or others) decide what's a waste of energy or not.

[0]: https://cbeci.org/cbeci/comparisons [1]: https://news.ycombinator.com/item?id=26090317

[ballofrubber]

The energy costs of a block are not in relation with the amount of transactions in it. Just because you have two numbers, doesn‘t mean you should divide them.

Short rant:

The current settlement system is layers up on layers of legacy systems. How do international settlements exactly work? How long do they take? Where does money come from? Why should flawed metrics and corruptable humans decide when to issue currency?

Bitcoin follows a simple set of rules that everyone can understand in days of intense learning. An average developer can audit the code and can verify these rules. It‘s a simple and beautiful system that HN just loves to hate, for whatever reason.

[rspeele]

> The energy costs of a block are not in relation with the amount of transactions in it. Just because you have two numbers, doesn‘t mean you should divide them.

Right, they are unrelated. The energy costs are driven by how much Bitcoin is valued, so the more Bitcoin succeeds, the higher the energy costs go. The transaction rate does not increase, it stays around 400K/day, enough for everybody in Russia to make one transaction a year. Or for another example, for every business in the US to make 5 transactions a year. Is that a good thing or a bad thing?

The solution to Bitcoin's extremely low capacity for transactions is for it to be only actually traded on-chain by the largest institutions, like gold moving between vaults in the old days of metal-backed currencies. But in that world, most companies and certainly most individuals would trade using layers upon layers of complex systems built on top of Bitcoin, not Bitcoin itself. Very likely those layers will involve some form of centralization. So what's the point of all this elegance?

[ballofrubber]

Also I might add that the probability that the layers that people will use will be open source is very high. This inherently makes it more accessible to everyone.

If we look at the Lightning Network (a 2nd layer solution), there are 3 mainstream solutions, all open source.

On top of that you can have something like chaumian ecash, which is even more privacy preserving and cheaper.

Yes, we will need layers on top of Bitcoin, but thats a good thing. The base layer needs to be expensive (small blocks) in order to keep the cost of running a node as low as it is now (<$100)

[ballofrubber]

Because the base layer can be audited and not meddled with by third parties.

Everyone can build their own layers on top. There is no permission needed.

It's the peoples money.

[ballofrubber]

> The amount of electricity consumed every year by always-on but inactive home devices in the USA alone could power the Bitcoin network for 1.7 years

I don't know about you, but I see people escaping tyranny in monetary policy as less wasteful than US standby devices.

[ballofrubber]

Exactly!

Isn’t it awesome how secure the network is!

[rspeele]

It's awesome, but it should get even more awesome as BTC gains mainstream acceptance. The energy usage should hopefully one day match that of the USA or at least India to be even more secure.

After all, if Bitcoin is going to become the global reserve currency a 51% attack should be absolutely impossible. Right now all the mining being done is rewarded with a measly ~$55 million per day. That's within the reach of some rich individuals to outspend, to say nothing of big businesses, hedge funds, or even nation states. I think spending about $1B a day on mining would be more appropriate in the long run.

[ballofrubber]

Even at the current state you wouldn't be able to source all the asics needed for a 51% attack.

[rspeele]

Why buy them yourself? Just pay the people who already have them to find hashes for you. Pay noticeably better than the existing pools and they would line up at your door.

Miners are motivated by profit. They won't necessarily even know that you're trying to do a 51%, just that you're buying hashrate and are willing to pay them more than they're getting elsewhere.

edit: In fact, you could run a legitimate mining pool at a small loss for a while to build trust. Participating in your loss leader mining pool would be attractive to miners since the other pools, that skim some profit for themselves to support their operations, can't compete on price with one willing to lose a little bit of money. If you want, break it out into 3 "different" pools that you control so that it even looks to the naive like there's no 51% control. Then spring your trap.

51%ing Bitcoin is well within the resources of a motivated hedge fund, major corporation, or country. The motivation just isn't there right now.

[ballofrubber]

The motivation is extremely simple, as you can just short bitcoin, do your stunt and then cash in the rewards as you just crashed bitcoin.

However the game theory behind what you are saying is completely nonsense, which is why no one ever did nor will do your technically and economically impossible stunt.

[carleverett]

I don't think you could ever find the "true price" of a pure store of value asset like Bitcoin. Gold has been around for thousands of years and is still volatile enough that no one would want to use it for daily transactions.

The characteristics of a great store of value are different than that of a great currency - it seems naive to me to think that Bitcoin would ever act like a fiat currency that way.

[ballofrubber]

It's because the currency gold is priced in is going down year by year. Why should you spend your gold if your fiat is worth less tomorrow?

That's besides the point that gold is practically unusable as a currency for convenience reasons (divisibility, verification, storage, transportation).

A great currency is a currency that preserves your value over time, as currency is what you earn for spending your time and skill. You shouldn't be forced to take a risk to maintain your wealth. Today it's risky not to divest your fiat.

[carleverett]

"Store of Value" and "medium of exchange" are 2 separate functions of currency that shouldn't be served by the same asset.

[ballofrubber]

Care to elaborate?

I don't see why it shouldn't. I will always want the best SoV in exchange for my services, why would I want something else? If I need to exchange the currency for a SoV everytime, I might get the SoV from the get-go.

[carleverett]

A good medium of exchange should have: - Little to no transaction fee - Near instantaneous transaction time - stable value

The characteristics of Bitcoin that make it such a good store of value make it really bad at these. Computation-heavy proof of work creates a secure and immutable network, but also makes it more expensive and slows down transaction times. It's scarcity makes it a speculative asset prone to booms and busts, but gives it the best chance of long term value growth.

But I guess what you're saying is that as a buyer, why would I not want my money to live as a strong store of value up until the point of transaction, which I think I agree with. It'd be nice if you could own Amazon stock and then pay at McDonalds with USD taken out of the value of those stocks (though tracking capital gains would be annoying). In that situation though, Amazon stock is the good store of value and United States Dollar is the good medium of exchange.

[ballofrubber]

> - Little to no transaction fee - Near instantaneous transaction time

That can be done with Bitcoin today. Download a lightning capable wallet in the appstore of your choice and post an invoice, I can instantaneously pay that to your wallet with near zero fees.

> stable value

That is basically what I was saying earlier, we don't know the correct price yet. However bitcoin is only volatile upwards (if your time horizon is > 2 years)

Bitcoin is the perfect settlement base for layers built on top. The Lightning Network uses Bitcoin for its trustlessness and payments are also denominated in bitcoin.

I know that I sound like the typical Bitcoin-shill, but I really think that this is the one of the most important projects of our lifetime. It is the first shot at seperating money from power. Some of us just need to accept that we missed the early train and didn't get rich (we all would have sold at $200 if we bought at $0.30), but accept it for what it is. The first and only trustless, permissionless and decentralized monetary network.